India and Indonesia risk the biggest fallout from geopolitical shocks

A triumvirate of high oil prices, a surging dollar and geopolitical instability are set to weigh on India and Indonesia among Asia’s emerging markets, while energy exporter Malaysia may prove a rare beneficiary.

Economists are fretting over the fallout on developing Asia from a widening of the Israel-Hamas war, with policymakers struggling to assess the consequences for oil supply and the scope of the potential impact on growth. The jump in both the dollar and long-term Treasury yields exacerbate the risks for economies running high current-account deficits.